Magazine article American Banker

Online Banks Struggle to Stay Connected with Younger Mobile Users

Magazine article American Banker

Online Banks Struggle to Stay Connected with Younger Mobile Users

Article excerpt

Byline: Laura Alix

Direct banks, such as Capital One 360 and Ally Bank, may be disrupting retail banking, but a recent analysis suggests that they are also struggling to keep up with shifting customer expectations around their mobile channels.

Customer satisfaction with direct banks' mobile channels has fallen from last year, according to J.D. Power's new direct banking satisfaction study, released Thursday. The firm further found that direct bank customers' awareness of and engagement with basic functions they could perform in the mobile app had also declined.

Paul McAdam, senior director of J.D. Power's banking practice, said that these findings point to rapidly shifting customer expectations, not a lack of tech savvy on the part of customers.

"We know customer expectations are constantly increasing regarding the appearance, ease of navigation and the range of tasks that can be accomplished using mobile apps and mobile websites," he said. "This is true in banking and in many other services across the economy."

He said the dip in customer satisfaction with direct banks' mobile apps was mainly due to declining satisfaction among consumers under the age of 53. Gen X and younger customers were less satisfied with factors like the appearance of the mobile banking interface and ease of navigation, the firm found.

J.D. Power's findings imply that those digital-only institutions aren't just competing with other banks. Consumer use of other apps, like Uber or Seamless, is influencing customers' expectations in the banking sphere as well. …

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